August 21, 2018 / 4:07 PM / 8 months ago

UPDATE 1-FTSE 100 reverses on weak dollar and BHP Billiton

* FTSE 100 down 0.3 pct

* BHP Billiton falls 2.1 pct after results

* HSBC upgrade to “buy” boosts Aggreko up 4.5 pct

* Flat bookings outlook drives Hostelworld down 9 pct

* Morrisons, Sainsbury’s, Ocado rise on strong sales (Updates prices, adds details, quotes)

By Helen Reid

LONDON, Aug 21 (Reuters) - Britain’s top share index retreated on Tuesday as investors as a weak U.S. dollar weighed on multinational stocks and results from BHP Billiton disappointed.

U.S. President Trump’s criticism of Federal Reserve interest rate hikes in a Reuters interview hit the dollar and boosted the euro and sterling.

The president also poured cold water on hopes around trade talks with China, saying he does not expect much progress from the talks and has “no time frame” for ending the trade dispute.

The FTSE 100 ended the day down 0.3 percent, while the FTSE 250 managed a 0.5 percent gain.

Defensive, high-yielding stocks including consumer staples and healthcare have outperformed as investors grow more cautious.

On Tuesday, however, the multinational exporter stocks reversed early gains to become the biggest weight on the index as the dollar slid further, denting the value of their U.S. revenues.

British American Tobacco, Diageo, and Unilever declined 0.7 to 2.1 percent.

Results drove the sharpest moves.

BHP Billiton shares fell 2.1 percent, the biggest FTSE 100 faller, after concerns over rising costs and the impact of trade tensions outweighed a 33 percent jump in profits which still missed forecasts.

BHP’s final dividend, a record $0.63 a share, also disappointed the market.

“We think this could have been higher as net debt is less than $11 billion and the sale of U.S. onshore has been agreed,” wrote Goldman Sachs analysts.

Supermarket groups WM Morrison and Sainsbury , and online grocer Ocado were among top gainers, up 1 percent to 2 percent after data from Kantar Worldpanel showed strong sales growth for all three.

The data showed Morrisons was alone among the big four supermarkets in maintaining its market share against German discounters Aldi and Lidl.

Retail investment platform operator Hargreaves Lansdown was a late faller, down 1.9 percent after a media report U.S. bank JP Morgan is launching a free digital brokerage service next week.

Leading mid-caps, oil services firm Wood Group jumped 8.3 percent after its first-half profit came in at the higher end of its forecast, and it raised the cost-savings target for its merger with Amec Foster Wheeler by $40 million.

Temporary power provider Aggreko rose 4.7 percent after HSBC upgraded the stock to ‘buy’ from ‘hold’.

“We think that much of Aggreko’s woes are cyclical rather than structural,” wrote HSBC analysts.

Reporting by Helen Reid; editing by John Stonestreet and Alison Williams Williams

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